Oil Trades Near 6-Week Low as U.S. Jobless Claims Prompt Recovery Concerns

Crude oil traded little changed near a six-week low after falling as increased U.S. jobless claims and a contraction in manufacturing added to concern the economic rebound in the world’s biggest oil-consuming country is slowing.

Oil, which is down 1.3 percent for the week, fell yesterday after the Labor Department said initial jobless claims rose to the highest level since November. The Federal Reserve Bank of Philadelphia’s general economic index dropped to the lowest reading since July 2009. Total U.S. petroleum inventories are the highest in at least 20 years, Energy Department figures show.

“Sentiment and the fundamental news at the moment is still quite bearish, and I think that will weigh on the market and probably see prices lower,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “I think $70 to $68 is on the cards.”

Crude oil for September delivery was at $74.37 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange at 10:06 a.m. Sydney time. Yesterday, the contract fell 99 cents, or 1.3 percent, to $74.43, the lowest settlement price since July 7. Futures are up 2.6 percent from a year ago.

Initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, U.S. Labor Department figures showed. Claims exceeded all estimates of economists surveyed and compared with the median forecast of 478,000.

Brent crude oil for October settlement was little changed at $75.21 a barrel on the ICE Futures Europe Exchange in London at 10:05 a.m. Sydney time. It slipped $1.17, or 1.5 percent, to end the session at $75.30 a barrel yesterday.

Equities Decline

“U.S. stocks tumbled on the back of weaker-than-expected economic data, with unemployment claims unexpectedly jumping to the highest level in 9 months and the Philadelphia Fed survey showed manufacturing had shrunk,” Ben Potter, a market strategist at IG Markets in Melbourne, said in an e-mailed note.

The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7 this month. Negative readings signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Economists forecast the measure would rise to 7, according to the median of 58 projections in a Bloomberg News survey.

The Standard & Poor’s 500 Index declined 1.7 percent in New York, and the Dow Jones Industrial Average dropped 1.4 percent. The dollar climbed yesterday, reducing the appeal of commodities as an investment.

A U.S. Energy Department report on Aug. 18 showed that total petroleum stockpiles climbed 5.34 million barrels to 1.13 billion in the week ended Aug. 13, the highest level since at least 1990. Supplies of crude oil fell 818,000 barrels to 354.2 million barrels, according to the Energy Department report. Gasoline stockpiles dropped 39,000 barrels to 223.3 million.

Gold Rises to Seven-Week High as U.S. Unemployment Spurs Demand for Haven

Gold futures rose to a seven-week high after a U.S. report showed an unexpected jump in initial jobless claims, adding to concern that the economy is slowing and boosting demand for bullion as a haven.

Claims rose by 12,000 to 500,000 in the week ended Aug. 14, the Labor Department said today. That exceeded all estimates of economists surveyed by Bloomberg News. Before today, gold climbed 12 percent this year, outperforming equities, on signs that global growth may be losing momentum.

“There’s tremendous uncertainty and the recovery is spotty,” Caesar Bryan, who manages $609 million in the GAMCO Gold Fund Inc., said today in a Bloomberg Television interview in New York. Gold “is in a multiyear bull market. Prices are going to go up.”

Gold futures for December delivery rose $4.60, or 0.4 percent, to $1,236 an ounce at 9:50 a.m. on the Comex in New York, after touching $1,236.80, the highest price for a most- active contract since July 1.

“Concerns about a slowing economy in the second half still prevail, supporting the safe-haven asset,” Lee Suk Jin, a commodities analyst with Seoul-based Tong Yang Securities Inc., wrote in a report today. “In the short term, gold may continue to be propped up by demand from investors trying to avoid risky assets due to uncertainties in the markets.”

Before today, gold futures gained 5.9 percent in the previous three weeks as concern deepened that the global recovery may falter.

FCPO Daily Commentary for 20th Aug 2010

FCPO 3rd month Nov futures contract traded RM15 lower to close at RM2595 levels as compare to previous trading sessions with a total of 13,658 lots traded in the market. FCPO price opened lower trading as soybean oil and crude oil traded lower during overnight trading but FCPO soon manage to recover from losses as soybean oil and crude oil electronic trading were traded higher during trading sessions.
FCPO price manage to reach support levels at RM2570; 200% Fibonacci support levels, in the hourly price chart while RM2580 also seen as another support levels which indirect forms a support range for FCPO price trading. Technically, FCPO price seem manage to rebound 61.8% Fibonacci resistance levels at RM2604 upon complete on rebound wave count where next nearest support levels were expected around RM2571 and RM2556 in the coming trading sessions. However, FCPO price must not be trading over resistance levels at RM2604 and RM2632 in order for correction wave to remain intact.

FKLI Daily Commentary for 20th Aug 2010

FKLI Aug Futures contract traded 3.5 points higher to close at 1389.0 levels as compare to previous trading session to with a total of 6,964 lots traded in the market. FKLI opened higher for trading as regional indices were traded higher during earlier trading sessions but profit taking soon come into picture after FKLI were traded almost 10 points higher as compare to pervious trading sessions.
FKLI price surge higher after found support levels at 1377; 78.6% Fibonacci support level, in the preiovus trading sessions before FKLI was traded higher to reach high at 1395.5; 161.8% Fibonacci resistance level, in the hourly price chart. Technically, FKLI seems undergoing minor correction wave 4 where critical support levels at 1384 and 1377; 61.8% and 100% Fibonacci support level, were not violated in the coming trading sessions. However, FKLI must be capable to overcome resistance levels at 1395.5 and 1400 in order further affirm uptrend remain strong to thrust higher in the coming trading sessions.

Crude Oil Trades Near Five-Week Low on Signs Economic Growth Is Faltering

Crude oil traded near a five-week low after Asian equities declined, New York manufacturers’ orders fell and U.S. homebuilders turned more pessimistic, increasing concern that global economic growth is faltering.

Oil dropped for a fifth day yesterday, the worst run of losses in more than a month, after economic growth in Japan missed expectations. The Federal Reserve Bank of New York reported that orders and sales dropped in August for the first time in more than a year.

“The market is still concerned about weakness in the global economy,” said Ken Hasegawa, commodity-derivatives sales manager at brokerage Newedge in Tokyo.

Crude for September delivery was at $75.33 a barrel, up 9 cents, at 9:25 a.m. in Singapore on the New York Mercantile Exchange. Yesterday, the contract fell 15 cents to settle at $75.24 a barrel, the lowest level since July 12. Futures have dropped 5.1 percent this year.

The Federal Reserve Bank of New York’s so-called Empire State factory index showed that bookings dropped for the first time since June 2009, while sales fell at the fastest pace since March 2009. The National Association of Home Builders/Wells Fargo confidence index unexpectedly declined to a 17-month low.

The Nikkei 225 weakened as much as 1.2 percent to 9,084.24 in Tokyo, dropping for a second day. The broader Topix index retreated as much as 1 percent.

Homebuilder Confidence

U.S. equities were mixed. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,079.38 as of 4 p.m. in New York, and the Dow Jones Industrial Average dropped 1.14 points to 10,302.01.

The National Association of Home Builders/Wells Fargo confidence index dropped to 13 this month, the lowest level since March 2009, from 14 in July, the Washington-based group said yesterday. Economists forecast a reading of 15, according to the median estimate in a Bloomberg survey. Readings of less than 50 mean that more respondents said conditions were poor.

Federal Reserve policy makers last week announced their first attempt to bolster growth since March 2009.

“If there is more weak data from U.S. economic indices in the rest of the week, the market may go down to around $72 a barrel,” said Newedge’s Hasegawa.

Gross domestic product in Japan climbed an annualized 0.4 percent in the second quarter, the country’s Cabinet Office said yesterday, pushing the economy into third place behind the U.S. and China. The median estimate of 19 economists surveyed by Bloomberg News was for growth of 2.3 percent.

Brent crude oil for October was at $75.66 a barrel, 1.1 percent higher on the London-based ICE Futures Europe Exchange. It rose 0.2 percent to settle at $75.63 yesterday. The September contract, which expired at the close yesterday, fell 26 cents, or 0.4 percent, to settle at $74.85 a barrel.

FCPO Daily Commentary for 17th Aug 2010

FCPO 3rd month Nov futures contract traded RM12 lower to close at RM2678 levels as compare to previous trading sessions with a total of 14,719 lots traded in the market. FCPO price settled lower after open higher for trading around RM2694 levels before starts to plunge lower before end of trading sessions as soybean oil and crude oil electronic trading were traded lower during trading sessions despite soybean oil was settled higher during overnight trading.
FCPO price plunge lower after attempt to penetrate resistance levels RM2730 and RM2700 failed during trading sessions. Technically, FCPO price seems would trade lower in the coming trading sessions after trading price manage to penetrate support trend line in the hourly price chart. Wave 4 count to likely complete correction phase around support levels at RM2637 and RM2613 regions provided resistance levels at RM2700 and RM2736 were not violated in the coming trading sessions.

FKLI Daily Commentary for 17th Aug 2010

FKLI Aug Futures contract traded 8.0 points higher to close at 1369.5 levels as compare to previous trading session to with a total of 5,028 lots traded in the market. FKLI opened lower for trading as regional indices and Dow Jones Futures were traded lower in the morning but soon manage to recover and traded higher as Shanghai Index were traded higher while Dow Jones Futures electronic trading turn green during trading sessions.
FKLI price continue to surge higher during trading sessions after reached support levels at 1355.5 regions; 38.2% Fibonacci support levels in the hourly price. Technically, FKLI continue to surge higher after wave 4 count to complete at 1355; 38.2% Fibonacci support levels before launch wave 5 where 1370 view as 61.8% Fibonacci resistance levels. FKLI would expected to trade higher in the coming trading sessions provided support levels at 1361 and 1355 levels were not violated during trading sessions while preferably traded price trading above resistance levels at 1370 and 1379 regions.

Crude Oil Rises From One-Month Low as U.S. Manufacturing May Have Expanded

Crude oil rose from a one-month low as traders increased bets that prices will rise and analysts predicted manufacturing in the U.S. may have expanded last month, spurring optimism over a recovery in fuel demand.

U.S. factory production and housing starts probably rose in July, economists said before reports this week. Speculative long positions, or bets prices will rise, increased 8 percent in the week ended Aug. 10, according to the U.S. Commodity Futures Trading Commission.

“Open positions increasing to the long side could add a dollar or two over the coming days,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney.

Crude oil for September delivery rose as much as 39 cents, or 0.5 percent, to $75.78 a barrel on the New York Mercantile Exchange and was at $75.68 a barrel at 7:33 a.m. in Singapore. The contract fell 0.5 percent on Aug. 13 to settle at $75.39, the lowest price since July 12. Futures fell 6.6 percent for the week, the most since the period ended July 2.

Oil declined last week as a lack of jobs prompted Americans to hold back on spending, according to Commerce Department figures. U.S. gasoline supplies also increased for the seventh week.

Brent crude oil for September settlement fell 41 cents, or 0.5 percent, to $75.11 a barrel on the London-based ICE Futures Europe Exchange on Aug. 13.